By  on September 16, 2005

MILAN — Tommy Hilfiger Corp. may be mulling a possible sale, but that's not halting the company's international push into new markets.

Today, Hilfiger opens a 16,145-square-foot retail/corporate complex here. The 19th-century structure, featuring Art Nouveau ironwork and glass atriums, houses a store, showroom and offices. Next month a cafe will open on the site, surrounding a cobblestone courtyard.

Hilfiger is renting the space, which stood empty for years. Merchant offices occupy the upper floors, equipped with large terraces overlooking the square. The store alone covers 1,700 square feet and features antique American oak flooring, dark-stained ash shelving units and brushed stainless steel accents.

The opening marks the brand's first major Italian foray since Hilfiger bought the rights to manage and distribute the brand from former partner Fincom SpA in March. The five-year partnership with the Italian company didn't roll out the boutiques as quickly as expected, resulting in just four stores in Turin, Catania, Pesaro and Bologna. Original plans called for about 20 stores.

Hilfiger plans to open 10 to 15 freestanding stores in Italy over the next three to five years, in cities like Florence, Rome and Milan, which could support a second store. Still, a company spokeswoman said the number-one priority is growing the wholesale business, a task the new showroom will facilitate. The brand is currently sold in nearly 1,000 doors across the country.

Tommy Hilfiger Europe BV posted revenue of about $532 million for the year ended March 31. Company officials estimate that Italy generates about 5 to 10 percent of turnover. TH Europe predicts that Italian revenue can increase over time to account for 15 percent of European revenues, a spokeswoman said.

Overseas growth, particularly in Europe and the Far East, is key to Hilfiger's future as the brand continues to struggle in the U.S. market. Hilfiger is off to the Far East next week for a tour through the region, including fashion shows in major cities, to boost his business there.

Hilfiger's European business used to be completely licensed, but the firm bought back the company and it is now a wholly owned subsidiary. However, Fred Gehring, head of Hilfiger Europe, and other partners, approached the U.S. group about buying the company this summer, prompting Hilfiger to hire JPMorgan Chase in August to solicit other offers.The store carries the men's and women's sportswear collections, and a smattering of denim and accessories. Although TH Europe shares buying offices with other Tommy Hilfiger subsidiaries, it designs its own collections targeting a European audience. Polo shirts are cropped higher and fit tighter, while overall fabric quality is higher than that of Hilfiger products in the U.S. A new premium jeans line, featuring embroidered back pockets, bows for spring.

Carissa Fortino, managing director of Tommy Hilfiger Italia SpA, said the brand already enjoys a higher positioning in Europe than the department store-driven U.S. market. The company plans to keep it that way by toning down some of the flag logos, cleaning up baggy silhouettes and competing more closely with European designers.

"The European customer likes more of a sophisticated fit. It's a bit more sleek and less oversized," Fortino said.

The building is located on a corner of Piazza Oberdan, a square on one end of the bustling Corso Buenos Aires shopping avenue. Nearby, Gucci stages fashion shows next door to the Hotel Diana Majestic. Just down the road, Dolce & Gabbana is renovating a movie theater into a new show space.

Despite this proximity to marquee designer territory, Hilfiger isn't planning a bash during the Milan shows later this month. Instead, it's slating an event for mid-October when Tommy Hilfiger will be in Monaco for the Swarovski Fashion Rocks for The Prince's Trust event.

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